One-time Wollongong mining magnate Arun Jagatramka has been ordered to pay back $12 million for the house his company - now called Wollongong Coal - bought for him to live in.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The NSW Supreme Court found that Mr Jagatramka had failed to exercise his duties to the company - now known as Wollongong Coal - which bought the property and built a mansion which he lived in.
The house at 64 Cliff Rd has appeared to be vacant for most of the time since Mr Jagatramka left town.
He returned to India after his company, Gujarat NRE Coking Coal, was taken over by Indian resources rival Jindal Steel and Power in 2013. The local operation was renamed Wollongong Coal and it and Gujarat have been involved in legal skirmishes ever since.
Mr Jagatramka had counter-sued Wollongong Coal directors - formerly directors of Gujarat NRE Coking Coal - Sanjay Sharma, Andrew Firek, and the late Maurice Anghie, claiming they were equally liable for any loss suffered by the company. This claim failed.
It's understood Mr Jagatramka intends to appeal against the judgment.
Justice Nigel Rein said the Jagatramkas had failed both their fiduciary and statutory duties to act in the best interests of shareholders by using company money for their own abode.
"I am not persuaded that the Jagatramkas have acted honestly or that, having regard to all the circumstances of the case, they should be excused," he said.
"They did not reveal their true intention to the other board members. Rather, they put up a proposal that was inconsistent with the purpose they actually intended. [The] arrangements by which they came to reside at Cliff Rd from October 2013 until April 2015 are opaque and invite suspicion. In any event, WCL has incurred a significant loss as a result of the purchase."
Justice Rein found the damage to Wollongong Coal to have been $6,403,050, and he awarded interest on top of that to the tune of $5,690.677.
The Jagatramkas did not give evidence in person.
"The likelihood of recovering the judgment sum is unclear at this stage," Wollongong Coal told investors.
The house was sold to a new company, Basant International, in 2013.
In 2011 the Mercury reported Mr Jagatramka's new job as executive chairman.
"The new job comes with a $1 million salary, a house, two cars and superannuation," we reported.
"'The company will provide a fully furnished residential accommodation to Mr Jagatramka and his immediate family members ... [and] two vehicles of an appropriate standard,' a statement confirmed."
Ben Langford
Senior journalist writing on the environment. Opinion columnist, independent. We rely on your news tips so please, don't be shy to let us know what's going on.
Senior journalist writing on the environment. Opinion columnist, independent. We rely on your news tips so please, don't be shy to let us know what's going on.
